Summaries of health policy coverage from major news organizations

San Francisco Chronicle Investigates Medicare Fraud in Bay Area

Dozens of San Francisco senior citizens "and perhaps hundreds of others" have participated in operations "that may have cost [Medicare] millions of dollars in the Bay Area," according to a San Francisco Chronicle investigation on Medicare fraud.

The Chronicle interviewed more than two dozen Medicare beneficiaries who said recruiters offered them money and other incentives to receive services at local health clinics. At certain sleep clinics, beneficiaries were asked to lie in beds for four hours with wires attached to their bodies while they watched movies. Medicare typically was charged $1,500 for the sleep studies, $800 for breathing and lung tests and $1,600 for tests related to dizziness. Seniors said they were driven to and from the clinics in vans and were given $100 when they were returned home.

In addition, some clinics provided electric beds and power wheelchairs to Medicare beneficiaries who did not need such equipment.

Records obtained by the Chronicle show that Medicare received questionable billings from 12 doctors and four clinics in San Francisco and San Jose and by 11 medical distribution firms in Los Angeles. The Chronicle reports that the Bay Area network "appears to mirror medical fraud rings that have been investigated and prosecuted in Los Angeles and dozens of other cities."

Investigation

FBI currently is investigating a network of clinics that employed recruiters to find patients from immigrant communities. Although no charges have been filed in the investigation, FBI has closed two clinics in the Bay Area.

Ted Doyle, head of a new CMS unit designed to find fraud in the Los Angeles area, said, "We're seeing California as a hotspot of fraudulent activity."

For example, an incomplete accounting audit found $553 million in improper payments in 2004 in California, according to a December Medicare report.

Collin Wong, head of the Medi-Cal fraud unit, said, "In the past six years, we've seen increasing amounts of criminal activity from several well-established organized crime groups, including the Russian mafia and Southeast Asian gangs" (McCormick, San Francisco Chronicle, 4/17).

Chronicle Examines Enforcement of Health Care Fraud

The Chronicle on Monday examined how health care fraud has become "a multibillion dollar business for a persistent breed of white-collar criminals" despite "years of investigations, congressional hearings and government crackdowns."

Malcolm Sparrow, a lecturer at the Kennedy School of Government at Harvard University, said that federal estimates of $20 billion in annual Medicare fraud underestimate the problem and that prosecutors have inadequate resources to address Medicare fraud.

In addition, people convicted of health care fraud frequently receive shorter sentences than others, Sparrow said. For example, drug possession carries an average federal sentence of 39 months, while those who commit health care fraud get an average of 14 months, according to a Chronicle analysis.

Wong said, "Health care fraud often gets overlooked and even trivialized, because it's seen as a victimless paper crime. But in reality, the financial burden falls on all of us. We pay for it with heightened health care premiums, increased taxes to pay for social service programs or ... the reduction of services."

Assistant U.S. Attorney Connie Woodhead, who is in charge of a new unit that addresses health care fraud in the Los Angeles area, said, "Tell Congress to give us some help. There is a lot of crime and ... not a lot of people to do the investigations" (McCormick, San Francisco Chronicle, 4/18).

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